The short answer
If you earn between R3,500 and R22,000, you qualify for "gap" housing, like the Finance Linked Individual Subsidy Programme.
The whole question
Why do people who earn R5,000 a month not qualify for RDP housing when they also can't get a loan from the bank?
The long answer
This is a problem that the government has recognised – it is called “gap” housing – and there is something called the Finance Linked Individual Subsidy Programme (FLISP), which might apply to you. I have copied and pasted the explanation of FLISP below from a GroundUp article:
If you earn more than R3,500 but less than R22,000 per month (which is the minimum amount needed to qualify for a home loan from a bank), you may apply for FLISP.
FLISP helps people who qualify for a home loan to buy a house for the first time. FLISP gives you a grant which can be used to reduce the initial loan amount. This will make your monthly FLISP repayments lower. It can also be used as a deposit.
The subsidy rates were amended in 2018, so if you earn R15,000 a month, you can now qualify for a subsidy of R62,304, compared to the previous amount of R20,000. If you earn R22,000 a month you can qualify for a subsidy of R27,960.
Since the 2018 changes to the FLISP programme, if you are a public servant getting housing assistance through the Government Employees Housing Subsidy Scheme (GEHS), you can still qualify for a FLISP subsidy. Contact the National GEHS Administrator to register for a FLISP subsidy.
FLISP grants can be used for both existing houses and to build a new one. It used to be the case that you could not sell a FLISP house before eight years, like an RDP house, but that no longer applies. However, if you sell your house, you may not apply for a second FLISP grant.
Besides getting approval for a home loan and earning between R3,500 and R22,000 per month, you must meet the same criteria for RDP houses as described below:
To qualify for an RDP house you must meet the National Housing Subsidy Scheme criteria. This means you must be:
A South African citizen
Over 21 and mentally competent to sign a contract
Married or living with a partner, or single and have dependants (single military veterans or aged people without dependents also qualify)
A first-time government subsidy recipient
A first-time homeowner
To apply for a FLISP grant, you must first go to your bank or financial institution and apply for a home loan. For that you will need:
Certified copy of your South African ID or passport/permanent residence permit
Copy of your signed Offer to Purchase the house or property
Proof of your current residential address
Official salary slip or stamped bank statement showing the last three months of income
To qualify for a home loan you have to be over 21, have been employed for a minimum of six months, have no defaults on your credit profile and earn above the minimum salary requirement as decided by your chosen bank. If your home loan application is denied, your FLISP application will not be considered.
Once this has been completed:
Ask for an “Approval in Principle” letter from the bank.
Register on the FLISP website: www.flisp.co.za or go to your municipal offices to register for a FLISP grant.
Compile the following certified documents for your application:
Home Loan Approval in Principle letter from your bank
Completed FLISP application form available from National Housing Finance Corporation (NHFC) website
RSA ID document or permanent residence permit
Certified copies of birth certificates/RSA IDs of all your dependents, and proof of foster children guardianship (where applicable)
Proof of marriage, civil union or partnership (an affidavit can be done for the latter)
Divorce settlement (where applicable)
Spouse’s death certificate (where applicable)
Proof of monthly income
Agreement of sale for the property or building contract and approved building plan (where applicable)
Once this is done, your completed FLISP application will be sent to the National Housing Finance Corporation to be processed.
Wishing you the best,
Answered on Nov. 11, 2021, 4:36 p.m.
Please note. We are not lawyers or financial advisors. We do our best to make the answers accurate, but we cannot accept any legal liability if there are errors.